Published in: Credit Cards | Dec. 17, 2018

Is Chase Sapphire Preferred® Worth the $95 Annual Fee?

By:  Eric Volkman

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The travel perks are practically unmatched! But is the card worth the annual fee for your credit needs?

scrabble tiles spelling "travel" surrounded by coins

Image source: Getty Images

This article was updated July 12th, 2019

While $95 isn’t a tiny sum of money, it’s quite the bargain for Chase Sapphire Preferred®. The travel credit card is popular because of the numerous benefits and solid lineup of perks that it offers. Although travel credit cards with no annual fee are becoming valuable options, it's worth reviewing how Chase Sapphire Preferred® cardholders more than get their money’s worth with this plastic.

Chase Sapphire Preferred® bonuses are worth $750

60,000 point sign-up bonus - A big draw for the card is that a generous sign-up bonus also comes in that inaugural year. Chase Sapphire Preferred® generates 60,000 bonus points once a cardholder spends $4,000 within the first three months of ownership. You'll also receive a 25% points bonus when redeeming through Chase’s travel portal, bringing the points value to $750.

2x points for travel and dining

But you don’t have to be a seasoned traveler to take advantage of the perks, because every purchase on a Chase Sapphire Preferred® card generates 1 point per $1. That doubles to 2 points per $1 when using the card for restaurants and travel.

Points are worth 25% more redeemed for travel through Chase’s portal

One reason this card has become practically ubiquitous for travelers is the 25% bonus received when redeeming points for travel through Chase Ultimate Rewards. Each point is worth $0.0125 apiece redeemed through Chase’s portal or an inferior (but still high conversion for a travel credit card) amount of $0.01 apiece. On the high end, this works out to a yield of 2.5% on travel and dining!

Spending Category Redemption Method Value per Point Yield
Travel and dining Chase Ultimate Rewards travel $0.0125 2.5%
Travel and dining Cash back $0.01 2%
All other purchases Chase Ultimate Rewards travel $0.0125 1.25%
All other purchases Cash back $0.01 1%

No foreign transaction fee

Chase Sapphire Preferred® is a card geared towards travelers, and as such its benefits tend to slant in that direction. A major draw for these folks is that using the card abroad generates no foreign transaction fees, a common way for U.S. banks to make a little more scratch from their customers who travel.

Considering that it’s almost impossible not to spend money when exploring London or Prague, these fees can add up to a substantial hidden expense. A typical foreign transaction fee is 3%, and that accumulates fast. It takes less than $3,200 in travel expenses to incur $95 in such charges. So, the savings on foreign transaction charges, for anyone spending even limited time abroad, can be worth this card’s annual fee alone.

Card Type Spending Abroad Foreign Transaction Fee Cost
Card w/o Foreign Transaction Fee $2,000 0% $0
Card w/ Foreign Transaction Fee $2,000 3% $60
Card w/ Foreign Transaction Fee $3,200 3% $96

Chase Sapphire Preferred® insurances are vast 

Whether you like to explore foreign climes or prefer to confine your travel to the U.S., Chase offers several bargains for those on the road using their Chase Sapphire Preferrred® card for travel purchases. 

Primary rental car insurance – Cardholders can decline the rental car company’s collision damage waiver to receive enhanced primary insurance, which provides an extra level of insurance akin to coverage on your personal vehicle: reimbursement is provided up to the actual cash value of the vehicle in the off chance of theft or an accident.

Baggage delay insurance – Cardholders, their spouse, and immediate family members are eligible for baggage delay insurance of up to $100 per day for five days. Reimbursement is available for items such as toiletries and clothes when baggage is delayed for more than six hours. 

Trip cancellation insurance - Trip cancellation insurance is included, and cardholders are eligible for up to $10,000 in reimbursements.

Trip delay reimbursement – Reimbursement is provided for purchases such as meals and lodging when travel is delayed by at least 12 hours for up to $500 for each purchased ticket.

Chase’s additional protections can be valuable

Similar to travel insurances, purchases placed on this card receive an added layer of protection.

Purchase protection - Chase also has your back if you buy faulty merchandise; its purchase protection covers new acquisitions for 120 days against theft or damage, at a maximum of $500 per claim and a total of $50,000 per account. 

Extended warranty protection - Another money-saving feature is the card’s extended warranty protection, which stretches out the manufacturer’s warranty on purchased goods by one year (provided that the included warranty is eligible for the program and has a term of three years or less).

Final take

Chase Sapphire Preferred® is structured to pay off nearly right away, particularly with the low $95 annual fee. That chunky 60,000 point bonus isn’t hard to earn and the bonus alone is worth quite a few years in annual fee payments. On top of that, there are the numerous money saving and earning perks that can accumulate nicely even if the cardholder never leaves his or her home town. So in the end, Chase Sapphire Preferred® is worth the annual fee and then some for many cardholders.

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